[SMM Nickel Holiday Comment] LME Nickel Consolidated at Highs During the Holiday, Rising to the $20,000/mt Mark on the First Trading Day After the Holiday

SMM Nickel News, May 6:

Review of the Labour Day Holiday Market:

During the Labour Day holiday (May 1–May 5), LME nickel overall consolidated at highs and moved sideways with relatively small fluctuations. On May 1, LME nickel closed at $19,410/mt. During the European session on May 5, LME nickel opened at $19,350/mt, reaching an intraday high of $19,515/mt and a low of $19,205/mt, holding up well. Overall during the holiday, LME nickel mainstream quotations were basically flat compared to pre-holiday levels. LME nickel inventory recorded a decrease of 1,002 mt for the week, while China's spot market saw no concentrated transactions due to the holiday closure.

In the early session on the first trading day after the holiday, LME nickel once surged to a high of $20,000/mt, breaking through the previous high with a gain of approximately 1.6%. In China, the most-traded SHFE nickel contract broke through 155,000 yuan/mt, with an intraday gain of approximately 3.8%.

Macro and Market News:

(1) To maintain ample liquidity in the banking system, on May 6, 2026, the People's Bank of China will conduct 300 billion yuan in outright reverse repo operations through fixed-quantity, interest rate tender, and multiple-price winning methods, with a term of 3 months (91 days) and a maturity date of August 5, 2026 (to be extended in case of holidays).

(2) On the evening of May 5 US Eastern Time, US President Trump posted on social media, stating that the "Freedom Plan" to "facilitate" vessel passage through the Strait of Hormuz will be suspended in the short term.

Spot Market:

On May 6, SMM #1 refined nickel prices rose by 2,800 yuan/mt from the previous trading day. Regarding spot premiums, Jinchuan #1 refined nickel averaged 1,250 yuan/mt, down 100 yuan/mt from the previous trading day. Domestic mainstream brand electrodeposited nickel premiums ranged from -800 to 100 yuan/mt.

Currently, the US-Iran standoff continues, and passage through the Strait of Hormuz has yet to return to normal. Neither side has made concessions on negotiation issues. Affected by disrupted sulfur supply, production costs of hydrometallurgy intermediate products have risen significantly, providing solid "cost floor support" for refined nickel. However, affected by sluggish downstream consumption, China's nickel inventory remains in a state of significant inventory buildup. In the short term, the most-traded SHFE nickel contract is expected to trade in the range of 145,000–155,000 yuan/mt.